Comprehensive Study of Water Rates Presented to New York City Water Board

Study Aims to Help Moderate Future Increases;
DEP Will Seek Input on Findings from Rate Payers and other Stakeholders

Today DEP presented the Final Report (PDF) on the comprehensive water rate study it commissioned from consulting firm Booz Allen Hamilton to the New York City Water Board. The study, which was conducted in two phases, was designed to help moderate future rate increases by benchmarking the current rate structure and potential alternatives; projecting future system needs in light of historical trends; and developing options to increase environmentally sustainable water usage and treatment.

“The water rate is the primary way that DEP funds the delivery of the best drinking water in the world to more than 8 million New York City residents, and 1 million other citizens of New York State,” said Acting DEP Commissioner Steven W. Lawitts. “At a time when many property owners are struggling to stretch their household budgets in the face of a difficult economy, it is critical that we look for the most fair, effective, and innovative ways to meet the system’s needs at the lowest possible cost.”

Beginning in January, DEP will seek input from property owners and other stakeholders, which will be used to develop recommendations for rate-structure modifications that will be presented to the water board this spring.

In Phase 1 of the Rate Study, 56 large water and wastewater utilities from around the country provided data on their rate structures, capital and operating budgets, and intergovernmental reimbursements and relationships. Highlights of the national comparisons included: Water utility rates across the country have significantly increased over the past decade, maintenance of infrastructure and compliance with Federal and State mandates are primary drivers behind capital expenditure programs, and DEP’s intergovernmental transfer, or rental payment, is comparable to other cities surveyed, although the other cities do not link their intergovernmental transfers to growth in debt service.

DEP manages the City’s water supply, providing more than 1.1 billion gallons of water each day to more than 9 million residents throughout New York State through a complex network of nineteen reservoirs, three controlled lakes and 6,200 miles of water pipes, tunnels and aqueducts. DEP is also responsible for managing storm water throughout the City and treating wastewater at 14 in-City wastewater treatment plants. DEP carries out federal Clean Water Act rules and regulations, handles hazardous materials emergencies and toxic site remediation, oversees asbestos monitoring and removal, enforces the City's air and noise codes, bills and collects on City water and sewer accounts, and manages city-wide water conservation programs.